Tuesday, September 29, 2009
The consumer confidence index dipped in September, and was disappointing relative to more optimistic expectations. Is this a good reason for the equity market to slump and for T-bond prices to rise? Not in my view.
This chart puts the latest move in perspective: you can't even seen the September dip. The big-picture story that is slowly playing out is one of recovery from the extremely low levels of confidence that accompanied the February plunge in equity prices. No index moves in a straight line, and no recovery is unmarred by periods of doubt. I think you have to look past minor setbacks such as this. Things are a whole lot better today than they were last February. There is still room for lots of improvement, to be sure, but that will come with time.
Posted by Scott Grannis at 7:13 AM